General Mills Plans 240 Chicago Layoffs

February 18, 1995|By Sharon Stangenes, Tribune Staff Writer.

Minneapolis-based General Mills Inc. said that it plans to shut three of four cereal production lines at its South Side operation and that 240 workers there will lose their jobs by the beginning of May.

The action, which the company announced to employees Friday, is part of a restructuring involving four plants with excess capacity, said company spokesman Craig Shulstad.

The Chicago plant, at 10459 S. Muskegon Ave., employs about 330 people and makes several cereal products, including Total.

A General Mills plant in suburban West Chicago with 600 employees will not be affected by the restructuring.

But about 200 hourly and 40 salaried workers, all full-time employees, will be slashed from the staff at the South Side plant.

About 50 workers will remain, and "a new flake cereal system which was started up in 1993 will continue to operate," said Shulstad. The rest of the workers at the plant may be relocated to other sites.

"It's our oldest plant," Shulstad said of the 71-year-old facility. "We have done a lot over the last decade to keep it competitive, but its age and structural design are such that it cannot accommodate the newer, state-of-the-art equipment. We would need to invest substantial additional capital to keep it."

The company announced total layoffs of about 350 people across the country.

General Mills said it will end puffed-cereal production in Albuquerque, affecting 15 temporary workers.

About 50 people will be laid off at Lodi, Calif., plants, with the consolidation of Squeeze-It juice production in Carlisle, Pa. And 45 workers will lose jobs in Covington, Ga., where production of snack foods will be scaled back.

Earlier in the week, General Mills officials said at a meeting of analysts in Arizona that the planned spinoff of the company's restaurant business and other restructuring moves would result in charges of as much as $170 million in the fiscal third quarter.

About $110 million of those charges will be taken by the packaged-food units, which produce such brands as Betty Crocker mixes and Wheaties and Cheerios cereals.

In December the Minnesota food giant announced its plan to split into two companies, one for consumer packaged foods and one for the restaurants, by the end of May, the close of the company's 1995 fiscal year.

Spinning off the restaurant business is expected to allow General Mills to focus more on the sluggish, $2 billion-a-year cereal business.